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I'm 28, Making $120k Per Annum & Renting: Why and How I Made This Sustainable?


Owning your property has always been one of the major milestones in everyone’s life. According to statista.com, the homeownership rate among Singapore residents was 88.9% in 2021. However, there is a trend among the younger generation to rent instead of buy.

With working from home now a common thing, the need for space and privacy becomes increasingly important. If you have working parents and siblings, can you imagine the noise and chaos 3 or 4 adults created if all are working from home at the same time? The youth of today also want to live a certain lifestyle and be independent instead of staying with their parents and family members.

Then there is the financial aspect of buying or renting and the pros and cons.

Financial commitment

When renting, the upfront cost is significantly lower. There is no downpayment of 20% of the property’s value, you just need to put in a security deposit of one month’s rental if the lease is for one year or two months’ rental if the lease is for two years. That’s a huge saving when compared to the 20% down payment which is usually in the ‘6-digit zone’ (at least $100,000), even for a BTO flat.

As a tenant, you do not have to worry about property taxes and monthly mortgage instalments. Being free from these financial commitments will allow you to spend your money on your personal interests or invest for the future.

Minimal Maintenance Costs or Repair Bills

Another major plus for renting is minimal maintenance cost for the property. Landlord is usually responsible for structural and permanent fixtures, while the tenant takes care of regular servicing of aircon (and any other appliances, subject to agreement with landlord). Therefore, the tenant only forks out very little maintenance costs and repair bills. The landlord or owner is responsible for the upkeep and improvement of the unit unless the damages are caused by the tenant, in which case, the tenant will have to make good the damage.

Location and Size Flexibility

Even though Singapore is a small country and the transport network is excellent, tenants have the luxury of choice where they want to live, be it in the heart of Orchard Road (if you can afford the rental), in the CBD area which is close to your office or in the outskirts near nature and parks.

Some may like to live in a “hip” location such as Holland Village or Tiong Bahru where there are many lifestyle choices and an abundance of amenities.

If you are currently single, you probably would rent a studio or a 2-bedroom unit, just enough for your usage and lifestyle. If you plan on getting married and starting a family, you can easily up-size without too much hassle by renting a bigger unit. Property owners probably will have to go through a much more tedious process buying and selling if they want to up-size or right-size.

Value of Home

In land-scarce Singapore, properties are more likely to appreciate than depreciate (subject to economic performance). However, if you own an aging property (e.g. HDB flat or leasehold condominium) with less than 30 years or so left on the lease, the valuation will start to decrease. Renting will eliminate this issue.

Is Renting Sustainable?

Depending on the situation and lifestyle, some will choose to rent and others will be more inclined to buy. In Singapore, the government pledged to make homeownership affordable and accessible for all. Measures such as housing grants and usage of CPF monies allow young Singaporeans, even those just starting in the workforce, to own a home.

Owning a property also allows you to build your assets which can appreciate over a certain period of time. You can then upgrade or down-size depending on your financial situation. Those who have progressed in their careers, may own multiple properties and collect rentals as a form of passive income, which tenants will not be able to enjoy such benefits.

Who Should Consider Buying?

If you have a family or plan to start one, you should probably be looking at buying a property for a stable home. If you are single and are financially sound and have sufficient money in the CPF accounts, then it might make more sense to buy a property as an investment for capital gain and rental income, which can double up as a home for the future should you start a family.

Who Should Consider Renting?

If your job commitments or career require you to move from one place to another frequently, then it might be better to rent. If you are overseas, homeowner or landlord duties such as repairs, regular maintenance and upkeep, and attending to tenant complaints could be a hassle if you are not present sometimes. In summary, if you're 28, single, and have yet to buy your own first property, then the recommended option would be to go into long-term investing instead of renting.

Either way, whether you want to buy or rent, www.mogul.sg always has the latest and best listing.With its unique 3D map and keyword search functions, looking for a property will be a breeze.

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